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Operating on commission: analyzing how physician financial incentives affect surgery rates

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  • Jason Shafrin

Abstract

This paper employs a nationally representative, household‐based dataset in order to test how the compensation method of both the specialists and the primary care providers affects surgery rates. After controlling for adverse selection, I find that when specialists are paid through a fee‐for‐system scheme rather than on a capitation basis, surgery rates increase 78%. The impact of primary care physician compensation on surgery rates depends on whether or not referral restrictions are present. Copyright © 2009 John Wiley & Sons, Ltd.

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  • Jason Shafrin, 2010. "Operating on commission: analyzing how physician financial incentives affect surgery rates," Health Economics, John Wiley & Sons, Ltd., vol. 19(5), pages 562-580, May.
    • Handle: RePEc:wly:hlthec:v:19:y:2010:i:5:p:562-580
    DOI: 10.1002/hec.1495
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    Cited by:

    1. Dominic Coey, 2013. "Physician Incentives and Treatment Choices in Heart Attack Management," Discussion Papers 12-027, Stanford Institute for Economic Policy Research.
    2. Kauhanen, Antti & Salmi, Julia & Torkki, Paulus, 2013. "Performance Measurement in Healthcare Incentive Plans," ETLA Working Papers 18, The Research Institute of the Finnish Economy.
    3. Aoife Brick & Anne Nolan & Jacqueline O’Reilly & Samantha Smith, 2012. "Conflicting Financial Incentives in the Irish Health-Care System," The Economic and Social Review, Economic and Social Studies, vol. 43(2), pages 273-301.
    4. Claudia Keser & Claude Montmarquette & Martin Schmidt & Cornelius Schnitzler, 2020. "Custom-made health-care: an experimental investigation," Health Economics Review, Springer, vol. 10(1), pages 1-12, December.
    5. Pablo Hernández de Cos & Enrique Moral-Benito, 2011. "Health care expenditure in the oecd countries: efficiency and regulation," Occasional Papers 1107, Banco de España.
    6. Pablo Cos & Enrique Moral-Benito, 2014. "Determinants of health-system efficiency: evidence from OECD countries," International Journal of Health Economics and Management, Springer, vol. 14(1), pages 69-93, March.
    7. Schuler, Sebastian, 2020. "Capping Commissions in the Presence of Price Competition," MPRA Paper 104867, University Library of Munich, Germany.
    8. Quentin, Wilm & Geissler, Alexander & Wittenbecher, Friedrich & Ballinger, Geoff & Berenson, Robert & Bloor, Karen & Forgione, Dana A. & Köpf, Peer & Kroneman, Madelon & Serden, Lisbeth & Suarez, Raúl, 2018. "Paying hospital specialists: Experiences and lessons from eight high-income countries," Health Policy, Elsevier, vol. 122(5), pages 473-484.
    9. Reo Takaku & Atsushi Yamaoka, 2019. "Payment systems and hospital length of stay: a bunching-based evidence," International Journal of Health Economics and Management, Springer, vol. 19(1), pages 53-77, March.
    10. Andrew Epstein & Scott Johnson, 2012. "Physician response to financial incentives when choosing drugs to treat breast cancer," International Journal of Health Economics and Management, Springer, vol. 12(4), pages 285-302, December.

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